Case Study: Fonterra New Zealand
In 2019, Fonterra, the largest dairy company in the Southern Hemisphere, partnered with Levno to revolutionise milk collection and improve milk quality on farms across New Zealand.
With a market share of 80% of dairy farms in New Zealand and responsible for 30% of the world's dairy exports, Fonterra sought a solution that could benefit both themselves and their co-operative members.
We had the opportunity to speak with James McCreery, MVT Implementation Manager at Fonterra New Zealand, about the benefits the company has seen since implementing Milk Vat Telemetry (MVT) with Levno. The partnership has already proven valuable, with benefits including enhanced logistics efficiency and improvements in milk quality.
By implementing MVT, Fonterra has optimised its milk collection fleet, resulting in the reduction of seven milk tankers. This represents a significant cost saving for the co-operative, thanks to the critical real-time data provided by Levno's Milk Vat Monitoring (MVM) system. Levno’s system monitors temperature, volume, agitation, milking time, and milk quality throughout the milking process. Levno provides accurate milking times so tankers can maximise the time available for collection without disrupting farmers. This simple time-saving measure, applied across 9000 farms, has resulted in significant efficiency gains for Fonterra. Additionally, actual milk volumes are provided so that Fonterra knows how much milk is available for collection in each vat on every farm before the tanker arrives.
After the first complete season, the implementation of MVT has not only increased efficiency, but also resulted in a 45% reduction in milk disposed due to temperature-related issues. This reduction in milk spoilage was observed by the collection and processing of milk that would have otherwise been discarded and measured via a reduction in the number of letters sent by Fonterra to support suppliers’ insurance claims. This has resulted in a significant improvement in sustainable productivity for both Fonterra and their suppliers. Furthermore, integration with Levno provides Fonterra with complete data on milking activity across all farms, enabling them to monitor and report on compliance requirements, increase traceability and improve milk quality.
The solution has been proven to deliver a compelling return-on-investment. Cost savings have been achieved in logistics by reducing fleet size and improving efficiency. A reduction in milk spoilage and fewer tankers travelling fewer kilometres has resulted in more sustainable production. Compliance and traceability have been improved by equipping every farmer with Levno’s system and App allowing them to remedy issues as they occur. And overall product quality has improved with a reduction in waste and an increase in individual farmers’ oversight.
So why did Fonterra choose Levno as their partner? According to McCreery, one of the major strengths of the partnership is Levno's team. The company has a wealth of experience working with and understanding New Zealand farming processes and practices. With the Head Office being based in the Manawatū region, many of its staff hail from farming backgrounds or have a strong connection to rural clients. Additionally, Fonterra saw benefit in Levno's 24/7 customer service and robust support networks for farmers. This level of support is crucial for the success of any partnership, especially in the agricultural sector where a quick response time is often necessary to address any issues and ensure minimal disruptions to milk collection.
Furthermore, Fonterra's decision to partner with Levno was greatly influenced by the company's reputation as a reliable and dependable partner. Levno's track record of success in working with other farmers and agribusinesses in New Zealand gave Fonterra confidence in the company's ability to deliver on their promises and provide a solution that would benefit both the company and its suppliers.
The partnership between Fonterra and Levno has been highly successful for the dairy industry in New Zealand. By implementing Levno's Milk Vat Telemetry (MVT) system, Fonterra optimised milk collection, improved milk quality, reduced milk spoilage, and increased sustainability while also saving resources. Levno's expertise, 24/7 customer service, and support networks were crucial in ensuring the success of the partnership, as well as their reputation as a reliable and dependable partner. The partnership has been beneficial for both Fonterra and its co-operative.